Cadbury tastes success amid financial meltdown

31 July 2008 / by Rebecca Sargent
As fuel companies announces losses of as much as 70 per cent for the first half of 2008, confectioner Cadbury stands in a league of its own with a 12 per cent rise in pre-tax profits to £143million.

It seems that Brits have been turning to comfort food in times of tight credit as Cadbury enjoys bulging profits. Cadbury chief executive, Todd Stitzer said: "Confectionary is a robust market. When you think about it, at Cadbury, we sell 'small amounts of pleasure' affordable treats. If you look back through history, you'll see that confectionary growth has been relatively unaffected by changes in GDP."

In the last two days energy giants EDF and British Gas have announced huge increases in annual gas and electricity bills, passing on the increased wholesale cost to consumers, despite continuing to accrue millions of pounds in profit.

However, Cadbury, which is also seeing increased costs – the price of cocoa was up 37 per cent this year compared to 2007 – has vowed to refrain from whacking premiums up until 2009.

Cadbury's chief finance officer, Ken Hanna added: "The higher oil price will start impacting the second half of this year: we're mainly talking about distribution and energy. As far as cocoa is concerned: As we've previously told you we will not see the impact on our costs until 2009, and it's much too early to predict that impact until we see this year's harvest."

As the world's largest confectionary company, Cadbury is confident of its future as it has so far managed to stay one step ahead of the game during the economic turmoil currently hitting all corners of the world.

Mr Stitzer added: "We remain confident of a successful outcome for 2008 with revenue growth around the top end of our goal range and margins in line with current market consensus. Despite difficult economic conditions, we are committed to deliver mid-teens margins by 2011."

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